Youngman v. Dept. Of Veterans Affairs , 699 F.3d 1301 ( 2012 )

United States Court of Appeals
for the Federal Circuit
__________________________
SHARON L. YOUNGMAN,
Claimant-Appellant,
v.
ERIC K. SHINSEKI, SECRETARY OF VETERANS
AFFAIRS,
Respondent-Appellee.
__________________________
2011-7139
__________________________
Appeal from the United States Court of Appeals for Vet-
erans Claims in Case No. 09-2785, Chief Judge Bruce E.
Kasold.
___________________________
Decided: November 9, 2012
___________________________
KENNETH M. CARPENTER, Carpenter, Chartered, of
Topeka, Kansas, argued for claimant-appellant.
KATY M. BARTELMA, Trial Attorney, Commercial Litiga-
tion Branch, Civil Division, United States Department of
Justice, of Washington, DC, argued for respondent-appellee.
On the brief were TONY WEST, Assistant Attorney General,
JEANNE E. DAVIDSON, Director, TODD M. HUGHES, Deputy
Director. Of counsel on the brief were MICHAEL J. TIMINSKI,
YOUNGMAN v. SHINSEKI 2
Deputy Assistant General Counsel, and CHRISTA A.
SHRIBER, Attorney, United States Department of Veterans
Affairs, of Washington, DC.
__________________________
Before NEWMAN, CLEVENGER, AND BRYSON, Circuit
Judges.
NEWMAN, Circuit Judge.
Sharon L. Youngman, as fiduciary and curator for de-
ceased veteran Lee T. Richardson, seeks payment of accrued
benefits of about $350,000 that had been awarded to Mr.
Richardson before his death. Payment of this sum had been
delayed while the Kansas state courts were accrediting Ms.
Youngman as successor fiduciary and curator for Mr.
Richardson, who had been adjudged incompetent several
years earlier. Mr. Richardson died after the accreditation
but before processing of the payment. Ms. Youngman seeks
the payment for distribution to Mr. Richardson’s heirs. The
Secretary refuses payment.
This appeal reaches us as a matter of statutory inter-
pretation. See 38 U.S.C. § 7292(c) (the Federal Circuit has
jurisdiction to review and decide any interpretation of any
statute or regulation under the designated sections).
DISCUSSION
On May 3, 2005, the Secretary of Veterans Affairs
(herein the “VA”) awarded 100% disability to Mr. Richard-
son, effective March 10, 1986. The award included ap-
proximately $350,000 in accrued benefits. On May 12, 2005,
Ms. Youngman was appointed by the VA as Mr. Richard-
son's fiduciary, the prior fiduciary having resigned. Pro-
ceedings were commenced in the Kansas District Court in
Wyandotte County for the appointment of Ms. Youngman as
3 YOUNGMAN v. SHINSEKI
Mr. Richardson's “curator” under Kansas law. On July 15,
2005, the Kansas court issued a formal “Order Appointing
Curator.” On July 27, 2005, the VA service center manager
in Wichita, Kansas issued to Ms. Youngman a certificate of
legal capacity to receive and disburse benefits, the certifi-
cate stating that the VA had received a $475,000 bond from
Ms. Youngman and that “all withheld funds can be released
to the Curator.”
Meanwhile, on July 7, 2005, at Ms. Youngman’s initia-
tive Mr. Richardson through counsel filed a petition for
mandamus in the Court of Appeals for Veterans Claims, to
compel the VA to pay the award of his accrued benefits. On
July 8, 2005, the VA wrote Ms. Youngman that the payment
was being withheld until her appointment was completed.
On July 13, 2005, an amended petition was filed in the
Veterans Court, identifying Ms. Youngman as Mr. Richard-
son's VA-appointed fiduciary. See Richardson v. Nicholson,
476 F.3d 883, 885 (Fed. Cir. 2007). On July 28, 2005, Mr.
Richardson died, the awarded funds still unpaid.
On August 12, 2005, counsel filed a motion in the Court
of Appeals for Veterans Claims to substitute Ms. Youngman
for the deceased petitioner, for release of the awarded funds.
Ms. Youngman sought to distribute the funds to Mr.
Richardson’s heirs, who are cousins of Mr. Richardson. The
court denied the petition and the Federal Circuit affirmed,
holding that Ms. Youngman, not being eligible for Mr.
Richardson’s survivor benefits, lacked standing to pursue
this claim. Id. at 886-87.
While that appeal to the Federal Circuit was pending, in
June 2006 Ms. Youngman filed a request for payment with
the VA, which was denied in July 2006. Ms. Youngman
appealed this denial to the Board of Veterans’ Appeals,
which dismissed the appeal for lack of jurisdiction, based on
YOUNGMAN v. SHINSEKI 4
Mr. Richardson’s death. In December 2010, the Court of
Appeals for Veterans Claims affirmed the Board's decision,
stating that even if the Board erred in holding that it lacked
jurisdiction, “Ms. Youngman nevertheless failed to demon-
strate prejudicial error.” The court cited 38 U.S.C. §
5121(a), which provides that
periodic monetary benefits . . . to which an individ-
ual was entitled at death under existing ratings or
decisions or those based on evidence in the file at
the date of death . . . and due and unpaid, shall,
upon the death of such individual be paid as follows
. . . (2) Upon the death of a veteran, to the living
person first listed below: (A) The veteran's spouse.
(B) The veteran's children (in equal shares). (C)
The veteran's dependent parents (in equal shares).
….
(6) In all other cases, only so much of the accrued
benefits may be paid as may be necessary to reim-
burse the person who bore the expense of last sick-
ness and burial.
No other categories of payee at death are provided in the
statute. No claim for sickness or burial expense is asserted
here. Ms. Youngman, as fiduciary or curator, does not fit
any of the statutory categories of persons eligible to receive
benefits that are due and unpaid upon a veteran's death.
Nor do Mr. Richardson’s heirs.
Ms. Youngman argues that as fiduciary she is entitled
to receive the funds that were owed to Mr. Richardson
before his death for distribution to his heirs, pointing out
that the VA explicitly stated, before the veteran’s death,
that the veteran is entitled to these funds and that they can
be released to the fiduciary. She states that this entitle-
5 YOUNGMAN v. SHINSEKI
ment differs from the payment of benefits to a spouse,
children, or parents under §5121(a), acknowledging that no
members of those classes exist. She states that this enti-
tlement was fully vested at the time of Mr. Richardson’s
death, that it was for retroactive accrued payments that
would have been paid but for the change in curators and the
delay of the state proceedings. Thus she states that as
fiduciary and curator she has standing to receive payment
of this vested obligation in accordance with 38 U.S.C. §
5502(a)(1), which provides for payment to the veteran’s
fiduciary for the veteran’s benefit:
Where it appears to the Secretary that the interest
of the beneficiary would be served thereby, payment
of benefits under any law administered by the Sec-
retary may be made directly to the beneficiary or to
a relative or some other fiduciary for the use and
benefit of the beneficiary, regardless of any legal
disability on the part of the beneficiary.
Regulations to effect this statute include: 38 C.F.R. § 13.55,
which provides that a veterans service center manager may
“select and appoint . . . the person or legal entity best suited
to receive Department of Veterans Affairs benefits,” 38
C.F.R. § 13.58, which provides that the same officer may
“make determinations as to the person or legal entity to be
appointed legal custodian to receive Department of Veterans
Affairs payments,” and 38 C.F.R. § 13.59(a), which provides
that benefits may “be paid to the fiduciary appointed by a
State court.” It is undisputed that Ms. Youngman is a duly
appointed fiduciary.
The VA argues that this relationship was extinguished
with the veteran’s death. The issue is comparable to that
addressed in Richard ex rel. Richard v. West, 161 F.3d 719(Fed. Cir. 1998). In that case, a deceased veteran’s brother
YOUNGMAN v. SHINSEKI 6
sought to be substituted for the veteran, pursuant to CVA
Rule 43(a), to obtain payment of the veteran’s service-
connected disability benefits. This court held that “the
intent to terminate a veteran's claim to disability compensa-
tion at death manifested by the structure and language of
the statutes themselves” precluded recovery of such benefits
by “a non-section 5121 claimant.” Id. at 722-23. The court
rejected the brother’s argument “that section 5121 merely
establishes an alternative yet nonexclusive means of recov-
ering disability compensation due a veteran at death” and
therefore did not apply to him, a non-section 5121 claimant.
Id. at 722. The court held that “a veteran’s death limits the
recipients, amounts, and processes of recovery of disability
compensation to those provided in section 5121.” Id.Although this case involves a fiduciary rather than a
substitute recipient, the principle is the same. By statute,
§5121(a) limits the payment of benefits due at the veteran’s
death, to a surviving spouse or child or dependent parent.
No payment can be made to the veteran’s estate, or any heir
other than as designated in §5121(a). The Court of Appeals
for Veterans Claims correctly held that the circumstances
herein do not provide an exception to the statutory restric-
tion.
Ms. Youngman argues that §5502, authorizing payment
to a veteran’s fiduciary, is independent of §5121’s restric-
tions on the distribution of accrued money owed to a vet-
eran. However, by its terms, §5121 governs the distribution
of accrued benefits “[i]n all . . . cases.” 38 U.S.C. §
5121(a)(6). While §5502 allows a fiduciary to stand in the
shoes of a veteran, the statute does not grant the fiduciary
rights beyond those of the veteran himself. Here, because
Mr. Richardson died without any heirs in the categories
qualifying under §5121, his unpaid benefits died with him.
The fact that Ms. Youngman was Mr. Richardson’s fiduciary
7 YOUNGMAN v. SHINSEKI
at the time of his death does not remove the restriction
explicitly provided by §5121(a). Ms. Youngman’s suggested
interpretation of the statutory scheme would lead to the
peculiar result whereby non-qualifying heirs of veterans
with fiduciaries could receive the veteran’s accrued unpaid
benefits, while non-qualifying heirs of veterans without
fiduciaries would not be eligible to receive such benefits.
We conclude that the Secretary correctly interpreted the
statute, and that the veteran’s fiduciary does not have
standing or authority to receive accrued benefits that were
unpaid at the veteran’s death, other than in accordance with
payments as provided in 38 U.S.C. § 5121(a), to designated
family members or for reimbursement of the expenses of
last sickness and burial.
No costs.
AFFIRMED